1. http://nodal.ercot.com 1 Market Trials DAM/RUC/SASM Weekly Update July 02, 2010

2. http://nodal.ercot.com 2 Antitrust Admonition ANTITRUST ADMONITION ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws. DISCLAIMER All presentations and materials submitted by Market Participants or any other Entity to ERCOT staff for this meeting are received and posted with the acknowledgement that the information will be considered public in accordance with the ERCOT Websites Content Management Operating Procedure.

3. http://nodal.ercot.com 3 Agenda DAM/ RUC/SASM summary QSE Activities for Next Week General Reminders/Updates Environment Report –Outages –Known Issues Special Topic Question and Answers / General Discussion Appendix ERCOT asks that Market Participants log into the WebEx session using their company name and then their name. This will allow ERCOT to take roll-call offline.

4. Market Trials 2010 Roadmap http://nodal.ercot.com 4

5. http://nodal.ercot.com 5 Submission Overview for Friday June 25 DAM submission overview 173 QSEs participated for Op Day 6/26 Energy Bids in the range of 25,623 to 42,607 MW per hour Cleared 19,852 to 28,222 MW energy per hr Cleared 11,657 to 16,818 PTP bids per hr Four major Load Zone prices ranged from $25.89 to $45.72

6. http://nodal.ercot.com 6 Submission Overview for Monday June 28 DAM submission overview 193 QSEs participated for Op Day 6/29 Energy Bids in the range of 27,734 to 44,948 MW per hour Cleared 19,852 to 28,222 MW energy per hr Cleared 11,618 to 13,719 PTP bids per hr Four major Load Zone prices ranged from $27.00 to $42.53

7. http://nodal.ercot.com 7 Submission Overview for Tuesday June 29 Submission overview 219 QSEs participated for Op Day 6/30 Energy Bids in the range of 27,492 to 42,492 MW per hour Cleared 21,193 to 29,026 MW energy per hr Cleared 15,832 to 18,775 PTP bids per hr Four major Load Zone prices ranged from $24.13 to $41.75.

8. http://nodal.ercot.com 8 Scenario Overview for Tuesday June 29 –Ran SASM Simulated AS undeliverability –Procured NSPIN from hours 1800-2400 Simulated AS failure to provide –Procured NSPIN, REGDN and REGUP from hours 2000- 2400 –Increased load forecast for the DRUC run. Increase load forecast by 1600 MW for hour 1600-2000

9. http://nodal.ercot.com 9 Submission Overview for Wednesday June 30 Submission overview 215 QSEs participated for Op Day 7/01 Energy Bids in the range of 26,158 to 39,957 MW per hour Cleared 19,624 to 26,354 MW energy per hr Cleared 13,325 to 15,839 PTP bids per hr Four major Load Zone prices ranged from $29.00 to $42.48.

10. http://nodal.ercot.com 10 Scenario Overview for Wednesday June 30 –Increased load forecast for the DRUC run. Increase load forecast by approximately 1600 MW for hours 1200-2400

11. http://nodal.ercot.com 11 Submission Overview for Thursday July 1 Submission overview 215 QSEs participated for Op Day 7/2 Energy Bids in the range of 25,564 to 38,703 MW per hour Cleared 19,713 to 25,604 MW energy per hr Cleared 16,169 to 18,886 PTP bids per hr Four major Load Zone prices ranged from $26.85 to $41.80.

12. http://nodal.ercot.com 12 Scenario Overview for Thursday July 1 –Delayed posting of DAM results and DRUC run Sent notification via notice builder of a half hour delay in DAM posting. Sent notification via notice builder of a half hour delay in the DRUC run.

13. http://nodal.ercot.com 13 RUC Execution Overview for this week RUC overview for the week: - ERCOT overwrite of COP’s 7/1

14. http://nodal.ercot.com 14 Next Week’s Activities Next week – Op Days are 7/7-7/10 DAM executing on 7/6-7/9 No guardrails - Bids/offers should be reasonable COPs should reflect zonal throughout the week. We are requesting no COP updates as a result of nodal market processes. Operational Scenarios: –No operational Scenarios scheduled Week 10 Note: Dates are DAM execution days 7/6/2010 - 7/9/2010 Objective Network Constraints Included DAM 4 x week DAM submissions No guardrails COP Updates Reflect zonal DRUC W/ each DAM HRUC Limited WRUC 1 x week SASM As needed Op Scenarios No Scenarios

15. http://nodal.ercot.com 15 Next Week’s Activities DRUC executing on 7/6-7/9 after DAM WRUC, HRUC and SASM executing on 7/7-7/9 HRUC and SASM –WRUC executing on Wednesday –HRUC will be executed on Wednesday, Thursday and Friday at 1 pm (target Operating Hours will be the balance of the Op Day) May be run for additional, non-supported hours –SASM will be opened if needed based on system conditions Next week Outages will be ignored July 1-9 for internal Outage Schedule testing Again, next week ERCOT may do workarounds outside the normal business process to sidestep any issues that arise. Furthermore, we may approve the results of the RUC software even if the result is operationally unreasonable. The purpose of this is to exercise settlement and billing determinants related to RUC. Week 10 Note: Dates are DAM execution days 7/6/2010 - 7/9/2010 Objective Network Constraints Included DAM 4 x week DAM submissions No guardrails COP Updates Reflect zonal DRUC W/ each DAM HRUC Limited WRUC 1 x week SASM As needed Op Scenarios No Scenarios

16. http://nodal.ercot.com 16 General Reminders/Updates Network Model Update –An updated settlement points and MP short name list was posted for the 6/15 load at http://nodal.ercot.com/readiness/markettrials/index.html http://nodal.ercot.com/readiness/markettrials/index.html –Next scheduled load is 7/14 Reminder regarding External Interfaces Specification v1.19M –Posted at http://nodal.ercot.com/readiness/sandbox/index.htmlhttp://nodal.ercot.com/readiness/sandbox/index.html –Targeted for delivery on 7/9 July 1-9 outages will be disregarded in the various processes. –ERCOT will be performing Outage Scheduling testing during this period. ERCOT will be continuing to run WRUC –Please be aware that WRUC requires valid COP data seven days out in order to have a good solution during the study period ERCOT will continue to announce on the Market Call the operating days for the next week –Less operating days during LFC test weeks –August is open to run operating days as necessary to complete verifications No Market call on Monday due to the holiday

17. http://nodal.ercot.com 17 Support Metrics * This week, 24 out of 147 questions were responded to outside of the 24 hour time frame. Market Participant Inbound Questions Last WeekThis Week

18. http://nodal.ercot.com 18 Day-to-day operations summary: Planned / Unplanned Outages Planned Outages 07/02/2010 6:00 P.M. – 11:00 P.M. –Database maintenance activities are planned during this period and will affect availability of following application services: »EWS ( Web Services) »MM UI Unplanned Outages 06/29/2010 12:10 P.M. – 12:45 P.M. –Users were unable to launch MM UI & CRR applications via the MIS portal due a script failure.

19. Environment Report-Known Issues Full DAM/RUC/SASM known issues list will post every Friday night at http://nodal.ercot.com/readiness/markettrials/dam/index.html http://nodal.ercot.com/readiness/markettrials/dam/index.html New DAM/RUC/SASM known issues Queries for updated Resource parameters returning rounded values – After updating Resource Parameters with new values that include a decimal place, users are seeing rounded values returned when they query for the updated parameters (via either Web Services or Market Manager UI) –The values are being captured correctly in the MMS database, but are returning incorrectly due to a rounding issue in EIP. –This issue discovered for Ramp Up Rate, Ramp Down Rate, and Break Point for both Normal and Emergency Ramp Rates http://nodal.ercot.com 19

20. http://nodal.ercot.com 20 Known issues closed out Closed14393Limited DAM Energy Only Offer and Bid Award retrieval issue DAM Energy Only Offer and Bid Award retrieval does not function if an Offer/Bid ID had been submitted for that day with leading or trailing spaces and only one non-space character. This can be avoided by ensuring that each Offer/Bid ID contains at least two non-space characters. This can be avoided by ensuring that each Offer/Bid ID contains at least two non- space characters. MMSUnder review Closed15607Awards xml file downloaded on Market Manager contains special characters at the beginning of the file. Open the xml file in Notepad, delete the special characters, save. MMSUIUnder review Closed15465Total cleared Bids and total cleared Offers should be equal. However, when DAM is AS insufficient, the clearing engine can over-procure offers by a small amount (1-3 MW). MMSUnder review Closed13792EMS defects regarding the table that counts offline and online hours to send to the market system for purposes of respecting minimum online time and offline time. EMS - issue during the database loads or software migrations where in some cases it is not properly counting the data in the table that keeps track of how long the unit has been online or offline past the last data load. Second issue where EMS was overwriting the telemetered resource status for purposes of writing to this table when small MW generation values were seen in the telemetry. EMS will change this to look at net MW rather than gross, and will also add a threshold value to ignore small values likely to be telemetry errors/deviations. ERCOT workaround in place for the first issue EMSFix in next EMS release Closed13792EMS defect regarding offline resources generating small MW quantities EMS overwrites the offline resource status if the unit is telemetered some some gross MW value. Fix will eliminate this overwrite. EMSFix in next EMS release Closed Reports delivered late to Phase 4.0The following report will be delivered late for Phase 4.0: NP5-751-CD, Daily RUC Committed or Decommitted Resources NP5-752-CD, Hourly RUC Committed or Decommitted Resources MISTargeted for early May release Closed15053The ability for DAM Operators to send free-form messages is not yet available In its current state, if DAM or DRUC is delayed and a message needs to be sent, it is not being received by the QSE. The workaround is that the DAM Operators will use the CM-VDI-NOTF for freeform messages until a solution is implemented. MMS/MISUnder review

21. Summary of DAM/RUC/SASM market trials Next week: - Focus on quality will continue to supersede timelines (i.e., may re-run DAM/RUC late to get better solution) -ERCOT continuing to address data issues -In short-term continue to need COPs to reflect actual plans (to compare with zonal) -More communication between ERCOT and MPs to address submission/data issues -We will continue to contact QSE periodically to address zonal/nodal COP inconsistencies to assist QSEs in identifying mismatches. http://nodal.ercot.com 21

22. LZ_South high price analysis OD 6/19 http://nodal.ercot.com 22 –There was a large bid (over 5000 MW) with a price at 500 $/MWh which became the marginal bid and set the price from hour 15-20. –From Hour 15 to 18, only Energy only offers/bids at LZ_SOUTH can solve constraint LA_PAL_VCAVAZ1_1 under contingency SLA_LOM8. This limited the energy clearing at LZ_SOUTH. –From Hour 19 to 20, only Energy only offers/bids at LZ_SOUTH can solve constraint N_VICT_VICTOR1_1 under contingency SVICMAG9. This limited the energy clearing at LZ_SOUTH

23. http://nodal.ercot.com 23 FAQ Data Center LocationInternet IPWAN IP Taylor 66.128.17.125 66.128.17.128 192.168.172.126 192.168.172.128 Austin66.128.16.125192.168.175.115 EWS Notification Delivery & Network Firewall Configuration –EWS Notification deliveries are currently originating from the following ERCOT servers listed below. To meet system demand and scalability requirements, we will be adding additional servers to this mix. To prevent any service disruptions, as a result of addition of new servers, we recommend your network firewall rules be configured to allow traffic based on address range as opposed limiting them to specific IPs. Current IPs in Play: Data Center LocationInternet IP RangeWAN IP Range Taylor66.128.17.0 - 255192.168.172.0 - 255 Austin66.128.16.0 - 255192.168.175.0 - 255 Recommended IP Ranges :

24. http://nodal.ercot.com 24 Q&A Q&A / Open Forum

25. Appendix –AS Info for the week –Pre- and post-DAM reports –Special Topics http://nodal.ercot.com 25

26. http://nodal.ercot.com 26 Submission Overview for June 25

27. http://nodal.ercot.com 27 Submission Overview for June 28

28. http://nodal.ercot.com 28 Submission Overview for June 29

29. http://nodal.ercot.com 29 Submission Overview for June 30

30. http://nodal.ercot.com 30 Submission Overview for July 1

31. Other Note: All transactions will be supported. Trade submission and confirmation (Energy, Capacity and AS Trades) may be exercised at this time. DAM notifications will be active. Phase 2 Validation process will be active and supported. QSE transactions that do not follow the guidelines are subject to cancellation at ERCOT’s discretion. ERCOT may run DAM on non-supported days. No QSE participation is requested, and ERCOT staff will not be available to answer questions regarding the outputs of these non-supported processes. CRR information from the market trials auction will be integrated into the market system. CRR Offers (by NOIEs) must contain CRR IDs from this auction in order to be valid. http://nodal.ercot.com 31

32. Supplemental Materials Slide 32 Reference and DescriptionLocationVersion External Interfaces Specification http://nodal.ercot.com/readiness/sandbox/index.html1.19 Explanation of Market Submission Items http://nodal.ercot.com/readiness/markettrials/connectivity/in dex.html 0.26 Market Manager User Guidehttp://nodal.ercot.com/readiness/markettrials/connectivity/in dex.html 0.06 MMS Requirementshttp://nodal.ercot.com/docs/pd/mms/index.html#reqVarious Market Connectivity Handbookhttp://nodal.ercot.com/readiness/markettrials/connectivity/in dex.html 0.97 DAM/RUC Known Issues Listhttp://nodal.ercot.com/readiness/markettrials/dam/index.ht ml N/A Web Services XSDshttp://nodal.ercot.com/readiness/sandbox/index.html1.3.19 Sample Reports, Extracts, and DDLs http://nodal.ercot.com/readiness/reports/index.htmlVarious DAM ERCOT Operating Procedures http://nodal.ercot.com/readiness/markettrials/dam/index.ht ml 2.0 DRUC/WRUC ERCOT Operating Procedures http://nodal.ercot.com/readiness/markettrials/dam/index.ht ml 0.2 http://nodal.ercot.com 32

33. http://nodal.ercot.com 33 Report Postings Posted by 6 am: Ancillary Services (AS) Plan Load Ratio Shares (these will be static based on Zonal production data as of October 16, 2009) * AS Obligations * Wind Generation Resource Power Potential (WGRPP) forecast * and Aggregated WGRPP forecast List of all Settlement Points and the mapping to Electrical Buses Load forecasts for ERCOT system, Weather Zones and Load Zones Load forecast distribution factors Distribution Loss Factors and forecasted Transmission Loss Factors Weather assumptions * Denotes MIS Certified reports

34. http://nodal.ercot.com 34 Report Postings Posted after each DAM: Awards (AS Offers, Energy Offers, DAM Energy-Only Offers, DAM Energy Bids, CRR Offers, and PTP Obligation Bids) * DAM Clearing Price for Ancillary Services (MCPC) Day-Ahead hourly Settlement Point Prices (SPPs) Day-Ahead hourly Locational Marginal Prices (LMPs) Shadow Prices Quantity of AS Offers Aggregated AS Offer Curve Total quantity of energy (in MWh) bought and sold in DAM See DAM Handbook for a list of all DAM/RUC/SASM reports available starting in Phase 4.0 - http://nodal.ercot.com/readiness/markettrials/dam/index.html. See MIS Handbook for a comprehensive list of reports available - http://nodal.ercot.com/readiness/markettrials/mis/index.html.http://nodal.ercot.com/readiness/markettrials/dam/index.html http://nodal.ercot.com/readiness/markettrials/mis/index.html * Denotes MIS Certified reports

35. Special Topics Phase 2 Validation reports and process Phase 2 validation re-evaluates all submitted transactions at 7 am in the day-ahead with updated information, such as AS Obligation, CRR ownership, credit limits, etc. If there is a validation error, ERCOT will cancel the transaction We send a notification that a Phase 2 report is available for a particular transactions type, and notification containing the cancellation for the transaction. You can query for the Phase 2 report via web service or on the Reports page of the Market Manager in order to view the reason for the cancellation. Correct and resubmit prior to 10 am. Note that submissions are locked out during the Phase 2 process, which is currently taking about 10 minutes to complete. http://nodal.ercot.com 35

36. Special Topics Day-Ahead Self Commitment DAM clearing engine treats your TPO differently if you submit Startup and Minimum Energy (SU/ME) costs as $0 vs. NULL If you submit with SU/ME as $0, DAM engine treats this as a normal offer where the QSE is not requesting SU/ME to be covered. HSL/LSL constraints will be respected. Also, if you are selected for an online Ancillary Service, you will also be awarded at least LSL on your offer curve. If you submit with SU/ME as NULL, DAM engine is signaled to ignore the HSL/LSL constraints for the resource. In this scenario, the offer curve submitted will start at 0 MW and go to the max MW quantity desired – again, DAM will ignore LSL/HSL constraints. If the offer curve submitted doesn’t start at 0 MW, it will be extended to 0 MW by DAM. If the resource is selected for Ancillary Services, no requirement to also award TPO at LSL (since no LSL constraint honored in this case). http://nodal.ercot.com 36

37. Special Topics Day-Ahead Self Commitment The purpose of the NULL: It allows a QSE to use part of a Resource to serve its own load, and then offer in the rest to the DAM and enable the offer to be co- optimized with its AS Offer. Example: A Resource has 100 MW LSL and 400 MW HSL, and the QSE has already committed 300 MW of the Resource through some other mechanism. The QSE wishes to offer the remaining 100 MW, which would otherwise be ignored due to the 100 MW LSL. Then going into real-time, so QSEs will need to update their TPO to cover the full capacity of the resource, from LSL to HSL, rather than from 0 MW. TPOs for real-time should always cover the entire capacity of the resource to avoid the proxy curve creation. To do the TPO update if the resource is awarded in the DAM, the QSE must provide a reason code, which is DSCM. This functionality came about due to TPTF subgroup on the issue. It has not yet been added to the protocols but will during our protocol traceability/cleanup effort. http://nodal.ercot.com 37

38. Special Topics Bid/Offer efficiencies ERCOT has identified efficiencies in Bid/Offers submission with regard to the format of submission This applies to all transaction that use a Bid ID or an Offer ID (Energy Only Offers, Energy Only Bids, PTP Obligation Bids, and CRR Offers) Preference is for QSEs to submit the same Bid/Offer ID for each hour in the submission, versus submitting a different Bid/Offer ID for every hour. The market system treats the submission the exact same way, regardless of which format is used Using the preferred format will optimize DAM system performance For xml examples detailing this issue, please view a document that will be posted along with this presentation on the calendar page at http://www.ercot.com/calendar/2010/04/20100409-MT http://www.ercot.com/calendar/2010/04/20100409-MT This was discussed at NATF 4/6, we send an email to the nodal technical contacts that we have on file for all QSEs, and we will add it to the External Interfaces Specification http://nodal.ercot.com 38

39. Special Topics JOUs and COP consistencies In DAM, if the different owners of the jointly-owned unit have submitted conflicting COP statuses for the current day, online statuses will overwrite offline statuses when DAM is determining the initial condition of the unit (i.e., is the unit online or offline at the start of the next operating day). In RUC, if the different owners have conflicting COP statuses for the next operating day: –If any owner has OUT status for any hour then the unit is considered OUT. –If all owners have submitted a COP, and at least one of them has an online status in a particular hour then the resource status for the unit is online (unless any owner has OUT) http://nodal.ercot.com 39

40. Special Topic – Jointly Owned Units JOUs are modeled as a single physical unit –DAM uses the separate logical resources when evaluating energy and ancillary services, but Network Security Monitoring (NSM), which is a sub-process of DAM, must consider the physical unit. –http://nodal.ercot.com/docs/pd/ida/wp/sgrm/IDA041_White_Paper_for_Split_Generation_Resource_M odeling_v1.dochttp://nodal.ercot.com/docs/pd/ida/wp/sgrm/IDA041_White_Paper_for_Split_Generation_Resource_M odeling_v1.doc JOUs offering into DAM –Owners offer their share into the DAM separately, but the physical unit must be committed together –All owners have to offer in the unit (energy or AS) to the DAM or else it cannot be committed to any owner (one exception for a self-commitment scenario described below). DAM must make a commitment decision about the physical unit, which it cannot do without offers from all the owners. –Self-commitment examples (assume three owners) – remember that self-committing by submitting Startup and Minimum Energy Costs as ‘NULL’ (leaving them out of the submission altogether rather than submitting zeroes) signals the DAM software that it doesn’t need to make a commitment decision and to ignore resource constraints. If two owners self-commit (startup/minimum energy costs are NULL) and the other submits nothing, the unit can be awarded without making a commitment decision. If one owner self-commits, another submits a TPO with startup/minimum energy costs, and the third submits nothing, the unit cannot be awarded If one owner self-commits, and the other two submit TPOs with startup/minimum energy costs, the unit can be awarded after making a commitment decision based on the resource constraints and the submitted startup/minimum energy costs. –Note that if self-committed, do not submit an OFFNS offer. That offer negates the self-commitment and the DAM software will not consider it as a self-committed resource (since the QSE is requesting ERCOT to evaluate the unit offline) http://nodal.ercot.com 40